New Coke

In: Other Topics

Submitted By kingTH14
Words 2057
Pages 9
New Coke: A Classic Brand Failure

Think of a brand success story, and you may well think of Coca-Cola. Indeed, with nearly 1 billion Coca-Cola drinks sold every single day, it is the world’s most recognized brand. Yet in 1985 the Coca-Cola Company decided to terminate its most popular soft drink and replace it with a formula it would market as New Coke. To understand why this potentially disastrous decision was made, it is necessary to appreciate what was happening in the soft drinks marketplace. In particular, we must take a closer look at the growing competition between Coca-Cola and Pepsi-Cola in the years and even decades prior to the launch of New Coke.

The relationship between the arch-rivals had not been a healthy one. Although marketing experts have believed for a long time that the competition between the two companies had made consumers more cola-conscious, the firms themselves rarely saw it like that. Indeed, the Coca-Cola Company had even fought Pepsi-Cola in a legal battle over the use of the word ‘cola’ in its name, and lost. Outside the courts though, Coca-Cola had always been ahead. Shortly after World War II, Time magazine was already celebrating Coke’s ‘peaceful near-conquest of the world.’ In the late 1950s, Coke outsold Pepsi by a ratio of more than five to one. However, during the next decade Pepsi repositioned itself as a youth brand.

This strategy was a risky one as it meant sacrificing its older customers to Coca-Cola, but ultimately it proved successful. By narrowing its focus, Pepsi was able to position its brand against the old and classic image of its competitor. As it became increasingly seen as ‘the drink of youth’ Pepsi managed to narrow the gap. In the 1970s, Coke’s chief rival raised the stakes even further by introducing the Pepsi Challenge – testing consumers blind on the difference between its own brand and ‘the real thing’. To…...

Similar Documents

Coke

...Coke On POE: Ask 50M Fans To Share Happiness Coca-Cola is asking its 50 million Facebook fans to share happiness. In this story you will get unlimited inspiration and insights about Coke’s POE, Crowdsourcing and Social CRM strategy. Coke’s ground-breaking and integrated social marketing approach could inspire many brands and their CMOs. Let’s take a deep dive here… Coca-Cola is asking its 50 million Facebook fans for creative input about how it can make the world a “happier place”, in a scheme to activate its Open Happiness theme and to collect customer data. With Coke’s new Facebook App, fans can register their interest in the scheme by filling out their details, and they can share their ideas on happiness. On the app, Coca-Cola explains that users who give their permission will next receive marketing e-mails from the company and information may be disclosed to service providers who handle campaigns on its behalf or to affiliates who may send marketing offers and information. Coke has said the ideas it is looking for will be ones which enable people to be more active, give to others, be social or “engage in other activities associated with increased happiness”. Further information, including timelines for the project, will be revealed in the coming weeks. Now there are a few things at Coke that could really inspire CMOs. Are you ready for some of my opinions? Most marketers around the globe have embraced social media, but they failed to integrate it.......

Words: 1637 - Pages: 7

Coke

...PRESENTED BY: Sami Ullah Khan 27s-640 2 www.final-yearprojects.co.cc TABLE OF CONTENTS CONTENTS 1. 2. 3. 4. Acknowledgement. Mission statement Introduction. Coca Cola. a. Coca Cola International. b. History. 5. Management. 6. Market share. 7. Financial report. 8. Dividends and Cash Plan. 9. Products. 10. Strategic planning. 11. Bottlers owned by Coca cola 12. Coca Cola Pakistan. 13. Major Competitors a. Pepsi b. History. c. Financial assets. • Market share. • Financial report. • Products. • Methodology 14. Some basic information regarding marketing of coke a. Target market: b. Major segments: c. Factors effecting sales: d. Major competitors: e. Strategies of quality: f. Threats from competitors: g. Targets that would like to attain: h. Expanding target market i. Threats and opportunities for price: j. Strategies of getting goals i.e. “high profits”: k. Marketing strategy: l. Expectations for the coming year: m. How coke determine the yearly budget: 15. Marketing strategies 16. Pest analysis . 3 www.final-yearprojects.co.cc DEDICATION This report is dedicated to my beloved parents, Who educated me and enabled me to reach at this level. 4 www.final-yearprojects.co.cc ACKNOWLEDGEMENT We think if any of us honestly reflects on who we are, how we got here, what we think we might do well, and so forth, we discover a debt to others that spans written history. The work of some unknown person makes our lives easier everyday. We believe it's......

Words: 9944 - Pages: 40

Coke

...The case study prepared by Archie B. Carroll entitled, “Coke and Pepsi in India: Issues, Ethics, and Crisis Management”, describes issues two major, well known multinational corporations (MNCs) have been facing in India over the past several years, since 2003. Coke and Pepsi are known competitors in the world of soft drinks, but have become allies given the situations they are facing in India. There are allegations of highly contaminated soft drinks, which claim to cause cancer and birth defects. An interest group in India, Center for Science and Environment (CSE) made the allegations and stated tests can verify the products contain high levels of pesticide residue (Carroll & Buchholtz, 2012, p. 649). Another special interest group, India Resource Center (IRC) raised concerns of an issue Coke experienced which is the claim of overconsumption and pollution of scarce water resources due to plant operations and production. This affected many cities and regions of the country, especially in the communities of Kerala and Mehdiganj (Carroll & Buchholtz, 2012, p. 649). In addition to the scarcity of water, there were also complaints of the water around the soft drink giant’s plants tasting and smelling bad. Donated waste to farmers for fertilizer tested positive for cadmium and lead creating toxic waste (Carroll & Buchholtz, 2012, p. 649). The allegations made by these groups were taken very seriously and believed valid because of the support of a very powerful and......

Words: 2047 - Pages: 9

Coke

...strategies, looking into snack food business, whereas Coke remained focused on carbonated beverages, seeking to expand in international markets. PepsiCo looked mainly to its core product, carbonated fizzy drinks, but also diversified its product offerings. It bought Frito-Lay, the snack business in 1965, beginning its long history of diversification, to reduce its dependence on cola drinks. In 1993, it launched bottled water, Aquafina, and in 1998, it acquired Tropicana juice brands, placing it in a good position to benefit from rising consumer demand for healthier drinks. In 2001, it acquired Quaker Oats, the cereals and snacks business, following the collapse of Coke’s negotiations to buy the company, revealing divisions on strategy within Coke’s board. With Quaker Oats came Gatorade, the market leader in energy drinks, further diversifying PepsiCo’s portfolio of companies. Aquafina water and Gatorade drinks have seen rises in sales, helping PepsiCo to offset declining sales of sugary carbonated drinks, where consumers have become concerned about health and obesity. Coca-Cola has also belatedly launched new products diversifying from sugary fizzy drinks, having launched Minute Maid fruit juice to challenge Tropicana, Dasani to take on Aquafina, and Powerade to compete with Gatorade. PepsiCo’s diversification programme and it’s brand building expertise has made it the world’s fourth largest food and beverage company. Coke, relies on carbonated fizzy drinks for 80......

Words: 3101 - Pages: 13

New Product Process Coke Zero

... MGT 4630 Developing New Product and Services Coke Zero study by Antonio Cardoso M9820394 The aim of this report is to critically evaluate a new product that has been launched in the last 10years. The report will assess the performance of the new product, the strategy and process used by the company in developing and launching the product and to see if it was successful or not. What is a new product and what is a new product development process According to Crawford and Di Benedetto (2011) a new product is one that is either new to an organisation or a market and that it can be broken down into the following categories They go on to suggest that a new product goes through the following stages 1. Opportunity Identification and selection 2. Concept Generation 3. Concept/Project Evaluation 4. Development 5. Launch New Products Management Tenth Edition Crawford and Di Benedetto (p30, 2011) It is worth noting that the text goes on to say about the above processes that “the activities are not sequential but overlapping and it is not implied that one phase must be completed before work can begin on the next one” . I’m expecting my analysis of a real world product will not only show that the process overlaps but that it is more flexible/agile. I think that two phases can be completed at the same time, or that in some circumstances or possibly for certain products that the new products team might go from phase 1 to 2 to 4 and then possibly back to 2 before......

Words: 1939 - Pages: 8

New Coke Case

...New Coke: A Classic Brand Failure Think of a brand success story and you may well think of Coca-Cola. Indeed, with nearly 1 billionCoca-Cola drinks sold every single day, it is the world’s most recognized brand.Yet in 1985 the Coca-Cola Company decided to terminate its most popular soft drink and replace itwith a formula it would market as New Coke. To understand why this potentially disastrous decisionwas made, it is necessary to appreciate what was happening in the soft drinks marketplace. Inparticular, we must take a closer look at the growing competition between Coca-Cola and Pepsi-Colain the years and even decades prior to the launch of New Coke. The relationship between the arch-rivals had not been a healthy one. Although marketing expertshave believed for a long time that the competition between the two companies had made consumers more cola-conscious, the firms themselves rarely saw it like that. Indeed, the Coca-Cola Company had even fought Pepsi-Cola in a legal battle over the use of the word ‘cola’ in its name, and lost. Outside the courts though, Coca-Cola had always been ahead. Shortly after World War II, Timemagazine was already celebrating Coke’s ‘peaceful near-conquest of the world.’ In the late 1950s,Coke outsold Pepsi by a ratio of more than five to one. However, during the next decade Pepsirepositioned itself as a youth brand. This strategy was a risky one as it meant sacrificing its older customers to Coca-Cola, but ultimatelyit proved successful....

Words: 2018 - Pages: 9

Coke

...| 9/26/2014 | | | | | | | | | | | | Coke vs PepsiWeek 5 Case Study | | | | | | | | | | | | | | | | | | | | | | | | Artesia Stivison, Robert Higdem & Rocky Edmondson | Coke vs Pepsi Week 5 Case Study Question #1 Question #2 Question #3 Question #4 Can you make poor investment decisions and be profitable? What evidence do you see from the companies’ results that indicate how well they made investment decisions (capital budgeting). A company can make poor investment decisions and still remain profitable, but only for a time. A company cannot continually make poor investment decisions and remain profitable forever. When looking at the Coke vs Pepsi case study, we find that Doug Ivester, then CEO of Coke, made a bad investment decision when he chose to increase the rate charged for syrup to franchisers. As a result, bottlers raised prices to improve profitability, and in turn there was a decrease in overall sales volume. During the time Ivester was CEO, the net income for Coke fell 41% and he ended up without a job. Had this been a trend that continued, Coke would have been out of business, but they rebounded and remain profitable. This example shows that a company can make a bad decision and continue to be profitable in the long run. But, repeat bad investment decisions and a company will go broke. Question #5 How does WACC change over time? What do you think might drive the changes? ......

Words: 1434 - Pages: 6

Coke

...Arman Ibric CC: Coke Zero DATE: July 1,2012 SUBJECT: Case Assignment The Coca-Cola Company has opened up many different types of different Coke drinks so that each can appeal to a certain target market. Types such as Diet Coke which at first was meant to appeal to younger women you were trying to lose weight. But recently it has been used by men 18-34 as well who were trying to stay more on the healthy side and who were going away from the normal Coke. Coke Zero is now marketed towards men without using the word “Diet”. It also changed its packaging to black and silver in 2007 and are spending more money into it than any other brand its size hoping it will over sell such as Coca-Cola Class and Diet Coke. Diet Coke Plus is another brand that coke is trying to grow. Diet Coke Plus was created so that more healthier customers who are looking towards nutrition would buy it. Diet Coke Plus is a sweeter version of Diet Coke but with vitamins and minerals so that the healthier consumers would feel better drinking it. Next, Diet Coke Black was created. It was a Cola with a coffee essence created for older, more sophisticated consumers who were willing to pay more money for it. Lastly, Full Throttle Blue Demon was lastly introduced. Its an energy drink with am agave azule flavor designed to appeal to Hispanic men. Each type of demographic segmentation is most likely to include men into it. This is because there is such a wide gap between males 18-34 years of age and Coke has yet......

Words: 960 - Pages: 4

Coke

...simply as Coke. Coca-Cola has a verity of different brand including, diet coke , Fanta, Sprite, Coca Cola Zero, Vitamin water, PowerAde, Minute Maid, and ext. Along with all these different brands that Coke carries it also has different products that are made to target different market segments. Diet Coke is one of them that was made to targeted women and fall under gender segmentation. Coke Zero is another which was made to target younger men and fall under both the gender and age segmentation. Diet Coke Plus was made to targeted those that were health conscious and it's a lifestyle psycho-segmentation. Coca-Cola Black was made to targeted older men that have higher income this falls under the gender and income segmentation. In the coke industry there are products that are going to bring new customers rather than keeping the old. An example of this is diet coke plus will lose customers to as coke zero because it has the same benefits but reached the target market intended for diet coke plus. Another example is coca-cola classic because it would suffer age discrimination and coke zero has the exact taste as the original. All of the other products have a different target market that is going to keep them retaining customers. Promoters of Coke Zero have used hidden camera’s as a way reach target market. The hidden-camera videos that the promoters used in Coke Zero were an effective way to reach its target market because it presented Coke Zero to be the young, hip new......

Words: 467 - Pages: 2

New Coke

...Introduction of New Coke * Coca cola is the world’s leading manufacturer, Marketer and distributor of Nonalcoholic beverage drinks. * It started in the US but today it can be found in every part of the world. * Both Coca Cola and Pepsi are rivals from the beginning * In late 1950’s coke outsold Pepsi by a ratio of more than 5 to 1 * But there was an unexpected turn in mid-1970’s when Pepsi conducted a blind test and majority of consumer’s liked the sweeter taste of Pepsi over Coke and began communicating this message through their “Pepsi Challenge” campaign and launched their ad campaign. This lead to slow and steady decline of coke in soft drink category. * But Coke’s market share was same and Pepsi was growing(in terms of new customers) but Pepsi had a better distribution channel and more vending machines * In 1980,Coke wanted to retain their market share and there was a risk of Pepsi growing very fast. So management in order to respond to Pepsi’s campaign began researching about Coke’s new formula. * Having produced its new formula, Coke conducted 200000 blind taste tests to see how it fared and the results they got were very good. The respondents not only liked the new taste of Coke but they preferred new coke over Pepsi. * So coke decided to scrap its old coke and decided to launch new coke in the market. But after a few days, sales of new coke was low and there was public outrage that original coke was not available. Potential......

Words: 453 - Pages: 2

Rflections on the Real Story of New Coke

...Reflections on The Real Story of New Coke On the April, 23, 1985, Coca-Cola Company began to introduce the reformulated Coca-Cola called New Coke into its largest market, the United States, to replace the original formula, which was regarded as a legend in marketing history. The reformulated coke promptly leaded to the country-wide storm of protests by the consumers who resisted the New Coke and called for the return of the original formula. Also, it drove people into a panic over losing their favorite soft drink. Customer Services in Coca-Cola Company and even its office were bombarded by the calls from thousands of fans of coke classic across the America. Even though this chaos ended with the return of coke classic, Coca-Cola Company, again, became the focus of the whole country and re-energized this fabled brand by helping its consumers realize that Coca-Cola was far more than a soft drink. Obviously, Coca-Cola intended to regain the lion’s share in its flagship market by taking this intelligent risk and it succeeded. The story of New Coke did not happen occasionally. At that time, the company was gradually losing its share in its largest market with its most popular product because of its chief competitor’s better performance. Coca-Cola had no choice but to change otherwise it would lose more. However, every change was along with unknown risks and conflicts and the company had to take the risk and face the conflicts. As a legendary company, Coca-Cola Company is never...

Words: 444 - Pages: 2

Coke

...Index 1. A brief Walkthrough 2. Introduction 3. Coke strategic Intent 4. External analysis 5. Internal analysis 6. resource based view 7. Value Chain Analysis 8. SWOT 9. Six Strategic Objectives 10. Financial analysis 11. Recommendations 12. Conclusions 13. Bibliography A brief Walkthrough Coca Cola is a well-known brand and the world’s leading beverage producer. The company is over 100 years old and enjoys patrons in over 200 countries. The company till date remains true to its vision and mission which has permeated through to all levels of the company. Coca Cola has a product of more than 3,500 beverages. These include * Energy drinks and Sports Drinks * Fruit and Fruit juices * Soft Drinks * Tea and coffee * Water * Other drinks The external environment analysis shows that coca cola enjoys a competitive position across the industry due to high capital requirements and exit costs. It has an intense but healthy rivalry with Pepsi. The Pestel analysis shows a growing demand for healthier alternatives to carbonated drinks which Coca-Cola is now addressing. Through the internal analysis of the company, we understand that the company has a competitive advantage in terms of its brand reputation and value chain process which it should continue to further use to its advantage. The value chain is perfectly aligned to ensure maximum efficiency. As the financial analysis, will show, Coca Cola...

Words: 5166 - Pages: 21

Coke

...elements are put to work. • The corollary of this, and the second of the two main principles, is that optimization of each aspect alone (socio or technical) tends to increase not only the quantity of unpredictable, ‘un-designed’ relationships, but those relationships that are injurious to the system’s performance. Therefore sociotechnical theory is about joint optimization. Sociotechnical theory, as distinct from sociotechnical systems, proposes a number of different ways of achieving joint optimization. They are usually based on designing different kinds of organization, ones in which the relationships between socio and technical elements lead to the emergence of productivity and wellbeing, rather than the all too often case of new technology failing to meet the expectations of designers and users alike. The scientific literature shows terms like sociotechnical all one word, or sociotechnical with a hyphen, sociotechnical theory, sociotechnical system and sociotechnical systems theory. All of these terms appear ubiquitously but their actual meanings often remain unclear. The key term 'sociotechnical' is something of a buzzword and its varied usage can be unpicked. What can be said about it, though, is that it is most often used to simply, and quite correctly, describe any kind of organization that is composed of people and technology. But, predictably, there is more to it than that. 2. Discuss the most likely organizational design for Coco-Cola......

Words: 1054 - Pages: 5

Coke

...Environmental issue Bottling operation is always a big problem for Coke Company since it causes huge environmental issues, especially in India. Environmental degradation in the form of depletion of the local ground water table due to the utilization of natural water resources by the company poses a serious threat to many communities. In March 2004, local officials in Kerala shut down a $16 million Coke bottling plant blamed for a drastic decline in both quantity and quality of water available to local farmers and villagers. Further, a scientific study requested by the court found that while the plant had "aggravated the water scarcity situation," the "most significant factor" was a lack of rainfall. Critics respond that Coke shouldn't be locating bottling plants in drought-stricken areas. In Plachimada, Coca-Cola is allegedly responsible for creating problems for communities by creating severe water shortages and polluting the groundwater and soil, destroying farms by draining them out completely. The plant here used about 900,000 liters of water in 2004, about a third of it for the soft drinks, the rest to clean bottles and machinery. It is drawn from wells at the plant but also from aquifers Coca-Cola shares with neighboring farmers. The water is virtually free to all users. These farmers who have been protesting say their problems began after the Coca-Cola factory arrived in 1999. In addition, in Mexico, citizens are indirectly forced to drink Coca-Cola...

Words: 799 - Pages: 4

Coke

...Coke and Pepsi Learn to Compete in India A. Identification of issues and Problems Step 1—overview of the case study During the 1900s and the beginning of the new millennium India’s government had opened its doors wide open to foreign investors, but the Coca-Cola Corporation and PepsiCo experienced many difficult challenges. Both companies were engulfed with unexpected problems and difficult situations that led to the recognition that India’s market was very different and special knowledge, skills and local expertise was needed to be obtained if the two companies were to succeed. As Ronald McEachern, PepsiCo’s Asia chief, stated, “India is the beverage battlefield for 2003”. Pepsi entered into the Indian beverage market in July 1986 as a joint venture with two local partners, Voltas and Punjab Agro, forming ”Pepsi Foods Ltd.” Coca-Cola followed suit in 1990 with a joint venture with Britannia Industries India before creating a 100% owned company in 1993 and then ultimately aligning with Parle, the leader in the industry. In many ways, Coke and Pepsi managers had to learn the hard way that ‘what works here’ does not always ‘work there’. In India, there are two main high seasons for the consumption of soft drinks. First being the summer session which lasts about seventy-five days in mid-April to June. The second major opportunity for Coca-Cola and PepsiCo in India is the annual Navratri celebrations. Another issue that the......

Words: 1965 - Pages: 8